Congress is still wrestling with the mess it made of student loan lending with last month’s legislation. The President has already indicated that he’s not interested in signing a plan like the one the Senate passed. The House plan is virtually incomprehensible, and promises pie-in-the-sky interest rate cuts that the Senate won’t deliver.

In the mean time, the borrowers are stuck in the middle. What’s the best course of action? First, learn about your options. Many people will tell you to get subsidized Federal student loans as a first preference, because they’ll save you money. Not true. That advice is about as helpful as telling you to go win the lottery is.

Not every prospective borrower is eligible for Federal student loans. Subsidized Federal student loans are available only to a small percentage of applicants, and a student’s financial need determines their award. If you and your family don’t meet specific income criteria, you don’t get subsidized loans.

You probably don’t get the best deal with Federal loans. FFELP lenders compete for your business. They offer interest rate cuts, origination and other fee waivers, and incentives for developing a good payment history. You don’t get any of that with Federal student loan programs, and with the exception of PLUS loans, the FDLP offers the same starting interest rates that the FFELP lenders do. Chances are good that you’ll save money by going with an FFELP lender over the FDLP.

After you’ve learned about your options, do some homework on potential lenders. Unlike the lies that the Congressional Democrats and Andrew Cuomo would have you believe, most FFELP lenders are honest, fair and forthright. They’re not in the game to take advantage of you and your university. Under the FFELP program, you have the right to choose any lender you like, regardless of whether they’re listed as a preferred loan vendor by your institution or not. You are always in control of your choice of lender. (That won’t be true under the Kennedy Plan, though.)

Choose the lender that best fits your needs and offers the incentives that best suit your situation. Lenders will compete for your business and can put together some very attractive financing packages. Pay attention to loan interest rates, but also pay attention to loan servicing. The direct impact of your loan servicing will mean more to you in the long run than the interest rate will. Congress caps the student loan interest rate for lenders in the FFEL program. The caps do not apply to non-FFELP loans, so it always pays to know whom you’re dealing with and what kind of loan you’re getting.

Congress wants to eliminate your choice. I suppose that’s one way of simplifying the process, but there’s a real, negative cost to simplicity, and that’s loss of choice. If you want to preserve choice and options, tell your Congressmen and Senators to stop shoehorning you into the Kennedy loan program